Walgreens to move from Old Post Office to Deerfield HQ

Walgreens Boots Alliance is shutting down its massive workspace in Chicago’s Old Post Office and consolidating operations at its suburban Deerfield headquarters, the company confirmed Monday — a major reversal of its pre-pandemic urban expansion strategy.

The move was announced five weeks after Walgreens completed its $10 billion sale to New York private equity firm Sycamore Partners. In an email to employees, the new CEO Mike Motz said the company “must make bold, decisive choices to free up resources” and that bringing its Chicago-area workforce under one roof would “enhance collaboration” and improve support for store teams, Crain’s reported.

Walgreens plans to close the downtown office by the end of January. The company leased roughly 200,000 square feet at the Old Post Office at 433 West Van Buren Street in 2018 — a high-profile deal that helped kick off the building’s transformation into a modern corporate hub. At the time, Walgreens said up to 1,800 employees could eventually work there, a symbol of its push to attract younger, tech-oriented talent in the city.

That vision never fully materialized. The Old Post Office lease runs through 2032, according to CoStar, and it’s unclear whether Walgreens will sublease the space or negotiate an early exit. Either scenario would deal another blow to a downtown office market battered by record vacancies and rising distress.

A spokeswoman for the building’s owner, New York-based 601W Companies, declined to comment. In 2019, 601W completed an $800 million overhaul of the Old Post Office building.

The Deerfield consolidation also fits into a broader downsizing trend for Walgreens’ real estate footprint. Last year, the company sold 18 acres of its corporate campus to Atlanta-based homebuilder Pulte Group, which is developing single-family homes on the site. A year ago, Walgreens began closing 1,200 of its 8,000 stores nationwide.

Motz, a former Staples retail chief installed by Sycamore, is leading Walgreens through a sweeping restructuring after years of weak performance, mounting debt and failed bets on healthcare ventures such as VillageMD.

The company’s breakup into five standalone private entities — including its core pharmacy chain, Boots Group in the U.K. and Shields Health Solutions — marks the most significant overhaul in its 120-year history.

— Eric Weilbacher